Exploring China's carbon emissions peak for different carbon tax scenarios

Abstract

Under the United Nations Framework Convention on Climate Change, China has made a commitment to peak CO2 emissions around 2030. China is still interested in fulfilling its commitment to address climate change. In this study, a diffusion model of energy technology based on endogenous technology learning under bounded rationality is developed to explore the possible impacts of different carbon tax conditions on the diffusion of energy technologies in China. It is concluded that the substitution of energy technology is a long-term and slow process. In the case of a high-carbon tax, transition technologies and new technologies will appear earlier and replace the original technology (6–8 years earlier than in the case of a lower carbon tax). The transition technology will become dominant only for a short period of time (around 2030) but will be quickly replaced by new technology. The traditional technology will cease to exist in the last thirty years of this century in all carbon tax scenarios. In the low-carbon tax or high-carbon tax scenarios, carbon emissions will peak in 2030 and then decline significantly. The peak in carbon emissions is lower under the high-carbon tax scenario than the low-carbon tax scenario, representing a 28% decrease.